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Mad Mail: Time to Sell Chesapeake?


Hi Jim: A big Nebraska Cornhusker Booyah to you! I have a question about Chesapeake Energy. I bought some shares on the high end and then bought more to try to cover my losses. Since then, the shares have lost even more money. My question is, do I stick it out or do I sell my shares and take my losses? -Thanks, Angel in Nebraska

Cramer says: “Angel has also been hit by something we eluded too earlier with EQT, which is the price of natural gas has suddenly fallen through the floor. It is below $4. Now, every time it has done that it has been a buying opportunity. Will this time be different? History says no. So I don’t want to sell Chesapeake even though it doesn’t have the best balance sheet in the business by far.”

Dear Cramer: Thank you for your “Health Care Mea Culpa” segment last night. Many of us in Cramerica are “back to even” thanks to the show, but a lot of us have also been caught flat-footed by the speed of the recovery and have been frustratingly underinvested. Even though you have been right to be unflaggingly bullish for the past year, it’s reassuring to know that even you can get scared out of this market at times. Even though it was not your intention, I think your cautionary call and subsequent self-flagellation was therapeutic for a lot of us. Can you please revisit Terra Nitrogen? -Kind regards Ron in Massachusetts

Cramer says: “Sometimes everybody gets tested. Terra Nitrogen is a classic case, and I have to repeat this again…where I mistakenly believed that the subsidiary, Terra Nitrogen, would be benefited somehow in this takeover. What happened is this subsidiary did poorly. That’s one of the reasons I said going forward that I would not recommend subsidiaries of major companies on this show.”

Jim: I want to thank you for yesterday's first block. It was well done and the right thing to do. Credibility is critical and you gained a good deal from that. I have noticed many good calls by you lately and the show has been terrific both for information and entertainment. -Steven in New York

Cramer says: “You can’t learn anything from the winners because you won. The only way to cut back losses is to study each loss.”







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